Alliance MMA sued by investor

April 19, 2017

An investor has filed a lawsuit against Alliance MMA for alleged violations of securities law and is seeking class action status.  The Complaint was filed in the U.S. District Court of New Jersey on Monday.

The lawsuit was filed just days after Alliance MMA issued an 8-K which reports to investors of specific events which may impact the company.  Alliance MMA is a publicly traded stock company on the NASDAQ exchange.  It had its initial public offering this past October.

The 8-K issued on April 7, 2017 states:

On April 7, 2017, the Board of Directors of Alliance MMA, Inc. (the “Company”) concluded that the condensed consolidated financial statements for thenine months ended September 30, 2016 included in the Company’s Form 10-Q for the quarter ended September 30, 2016 and for the three and six months ended June 30, 2016 should no longer be relied upon because of an error in recognizing as compensation transfers of common stock by an affiliate of the Company to individuals who were at the time of transfer, or subsequently became, officers, directors or consultants of the Company. The Company plans to include in its annual report on Form 10-K for the year ended December 31, 2016 revised financial information for the nine months ended September 30, 2016 and for the three and six months ended June 30, 2016. The Company’s chief financial officer has discussed the determination to restate these financial statements with its independent accounting firm.

As a result, the financial information previously provided to investors was not correct.  A lawsuit was filed 10 days later.

CEO Paul Danner issued a comment to MMA Payout here.  The lawsuit comes at a time when the company reported its annual financial results.

Plaintiff is seeking class action status as they believe that there is potential other plaintiffs were affected by the information.  Law firms are now seeking to sign up potential plaintiffs allegedly affected.

Payout Perspective:

This is an interesting lawsuit and is a look into the intricacies of securities law.  The stock is down as of this writing, trading at a 52-week-low, on the day it announced its 2016 financial results.  The lawsuit could be seen as investors attempting to garner money from the company for its error.  Whether or not there was reliance on the company’s will be key and plaintiffs (and potential plaintiffs) will likely argue that they reviewed Alliance MMA’s financial information prior to investing their money.  Since the 8-K refuted the previous information, it certainly is a tough spot for the company.

Deontay Wilder sued by Dominic Breazeale for hotel melee

April 18, 2017

Boxer Dominic Breazeale and trainer Manny Robles have sued Deontay Wilder, Marcellus Wilder and Marriott international in the U.S. District Court of Central California as a result of a hotel altercation that happened this past February.  The lawsuit was filed on April 13, 2017.

TMZ Sports has footage of what occurred.  This happened post-event in Alabama after Wilder successfully defended his heavyweight title against Gerald Washington.  Breazeale, a contender for Wilder’s title, appeared on the undercard.  The melee occurred in the lobby of the Westin in Birmingham, Alabama.

The Complaint alleges that Marcellus Wilder, the brother of the boxer, yelled derogatory remarks at Breazeale, who was sitting with his family in the audience after his fight, during Wilder’s fight.  At one point, according to the Complaint, Marcellus hovered over Breazeale’s 5-year-old son yelling profanity toward his family.  At this point Breazeale told Marcellus to step back from his children.   To avoid an altercation, Breazeale left the arena.

The Complaint goes on to state that the tort of assault and battery took place at the Marriott where plaintiffs claim the Wilders sought out Breazeale in the lobby of the hotel.  This is where the altercation took place.  The plaintiffs state that Marriott lacked enough security to deal with the situation which included the Wilders and fans that gathered there.

Payout Perspective:

It looks like Deontay Wilder is in another legal situation with one of his challengers.  This time, Breazeale is suing Wilder and his brother for an alleged hotel fight (or attempted fight).  The question of where was security is actually legitimate considering. The video seems to show the nature of the crowd.  Also, the Complaint brings up the fact that Breazeale’s young kids were involved makes it more sympathetic for the plaintiffs.  This could be a legitimate lawsuit or a way for the two to square off in the ring.

Johnson files appeal regarding Cormier’s weigh-in

April 14, 2017

Anthony Johnson has filed an appeal with the New York State Athletic Commission regarding Daniel Cormier’s weigh in.

In a letter from Johnson’s attorneys, Craig Zimmerman and David Mossberg, claim that Cormier did not know of his allowance to weigh-in again within two hours.  More to the point, they took issue with the weigh-in controversy on Cormier’s second attempt where he held the towels in front of him.  Cormier claims he did not know that he held the towels in a post-fight interview.

A portion of the letter (via MMA Junkie) states:

“Unfortunately, in the case, Anthony Johnson, the general public, and the sport of mixed martial arts were deprived of a fair and honest weigh-in and a true championship fight when Daniel Cormier was allowed to grab the towels held in front of him for privacy purposes only while his official weight was being determined.”

The letter goes on to demand Cormier to answer “under oath” to the commission and explain his actions regarding grabbing the towels.  It also requests that if Cormier is subject to discipline, he should be ordered to pay 20% of his fight purse to Johnson and stripped of the light heavyweight title.

Payout Perspective:

It is an interesting appeal due to the fact that Johnson announced his retirement in the Octagon.  Thus, the purpose of the appeal seems to be just to require Cormier to surrender 20% of his fight purse to Johnson.  It does seem like there should be some sort of investigation into the handling of the situation.  Coupled with the instant replay issue in the Chris Weidman-Gegard Mousasi fight, it seems like the New York State Athletic Commission has some issues it needs to review.  As for the towel situation, if it is not addressed, we will likely see similar actions in future weigh-ins where a fighter is near the weight limit.

Attorneys in UFC Antitrust Lawsuit Fight over Extension of Discovery Deadline

April 6, 2017

The parties in the UFC Antitrust lawsuit are battling over extending the discovery period with plaintiffs requesting more time and Zuffa attorneys arguing that the deadline should not be extended.  Plaintiffs are requesting a 60-day extension of the fact discovery period and remainder of the case schedule.

According to court rules, discovery, the process of requesting for and receiving information from the opposing side and third parties must be performed by a certain deadline as dictated by a case schedule or relevant rules.

The Plaintiffs request additional time to take the depositions of UFC personnel as well as certain third parties.

Plaintiffs also stated that it is issuing a subpoena for a “person most knowledgeable” at WME-IMG.  They note that this deposition will need to happen after the April 30, 2017 deadline (court rules require a 30 day notice for subpoena for depositions unless otherwise arranged by the parties).

In its motion, Plaintiffs state it has produced a total of 64,337 responsive documents totaling 206,403 pages.  It has reviewed approximately 323,000 emails and attachments 100,000 social media files and more than 6.6 million files from the six named Plaintiffs’ electronic storage devices to produce the 64,337 documents.  Also, it has defended the depositions of five of the six named plaintiffs with Cung Le’s depo occurring on April 11th.  Plaintiffs state that Defendants have produced more than 760,000 responsive documents but has not produced a privilege log which would detail the types of documents it has withheld due to attorney-client privilege.  Also, Plaintiffs claim that Zuffa “back-loaded” (provided documents later, than sooner) its production of documents.

On the other hand, Zuffa argues that the time should not be extended due to Plaintiffs’ inaction in not completing discovery.  It also claims that they are blaming Zuffa for the delay which, of course, Zuffa denies.

Zuffa argues that Plaintiffs’ request is similar to that the Court has already ruled on in September 2016 when it gave a 30-day extension.  It also states that Plaintiffs did no serve a second set of discovery requests until August 2016.  In response to the lack of privilege log, Zuffa states that due to the size and breadth of the number of documents involved, it has taken “some time to compile and complete.”  It notes that it will serve its privilege log on April 7, 2016.  It also compares Plaintiffs privilege log with a universe of 855 documents versus Zuffa’s of “more than 30,000.”

Payout Perspective:

These types of discovery fights happen all the time although maybe not involving such a voluminous number of documents.  For either side to use an argument in which they state the number of documents reviewed and produced may be a “straw man” argument since it’s not the quantity of documents but what is contained in the discovery.  The unique nature of this litigation which includes third parties that have or threatened to quash subpoenas have likely contributed to the delay.  Also, scheduling depositions is another issue as they must accommodate scheduling.  Plaintiffs could have unilaterally scheduled depositions to ensure that the depositions were noted.  Of course, there would have been risk as to preparation and also whether or not they had the necessary documents to ask witnesses.  Expect the Court to make a decision on this shortly.

Judge angered by WWE and Plaintiffs disregard for brief rules

March 29, 2017

A federal judge in Connecticut has issued a written smackdown of the litigation between the WWE and former wrestlers in a contentious lawsuit claiming that the company knew of information concerning a link between repeated head trauma and permanent neurological conditions that it exposed to its wrestlers.

The lawsuit involves former pro wrestlers Evan Singleton and Vito LoGrasso and World Wrestling Entertainment.  The Plaintiffs originally filed their lawsuit in Pennsylvania in January 2015.  They were among several former wrestlers that filed suit which were represented by the same lawyer and law firm.  The WWE successfully moved the case to Connecticut where the company is headquartered.  Judge Vanessa L. Bryant issued an order denying a motion for summary judgment from the WWE on the issue of fraud by omission claim brought by the wrestlers.

As part of the summary judgment motion, the parties must submit a statement of undisputed material facts (“SUF”) .  The party opposing the motion, has the opportunity to admit or deny the facts submitted by the moving party and then assert its own SUF.

The judge chastised both sides for submitting briefs that were longer than the rules allowed.  “[T]he parties have buried the Court in extraneous information, a substantial portion of which is argument and not fact.

The Court allows briefs for Motions for Summary Judgment to have a maximum limit of 46 pages.  However, WWE’s brief was 60 pages.  Plaintiffs submitted a 125-page statement in response to the WWE’s overlong brief.

As a result, the Court determined that the parties should refile its statements as they were “unnecessarily long and argumentative, and reviewing them in full would be wasteful of the Court’s scarce resources.”

The Court order both parties to submit revised Statement of Facts with a limit of 30 pages for the WWE and Plaintiffs to file a short response admitting or denying Defendant’s SUF and then filing 30 pages with its own disputed issues of material fact.

Order Denying Defendant’s MSJ by JASONCRUZ206 on Scribd

Payout Perspective:

The venom between the lawyers in this lawsuit is exemplified by the overlong briefs as they cannot agree on even the undisputed facts of this case.  As a requisite part of the filing, a concise statement is required.  Here, long does not necessarily mean effective.  Moreover, the order issued by the Judge shows she is not happy with either side.

Singelton and LoGrasso are the last WWE wrestlers standing as Judge Bryant dismissed similar claims brought by Russ McCullough, Ryan Sakoda, Matthew Wiese and William Albert Haynes, III as the Court concluded they didn’t wrestle with WWE after the company allegedly learned of a link between concussions and degenerative neurological diseases in 2015.

Quarry responds to Zuffa’s Motion for Summary Judgment of his claims

March 27, 2017

Attorneys for Nate Quarry have filed its Opposition Brief to Zuffa’s Motion for Summary Judgment to dismiss Quarry’s claims in the antitrust lawsuit filed in Nevada.  Quarry’s lawyers argue that while his last contract was in 2010, the harm to Quarry arose out of Zuffa’s scheme as a whole.

Quarry’s attorneys note that the former UFc fighter was “injured” during the limitations period – the four-year period between December 16, 2010 to December 16, 2014.  Among the claims is that he has not been paid from Zuffa during the period and continues to receive no payment from Zuffa’s “ongoing use of his image and likeness.”  Quarry notes that the use occurs through the use of his fights (including a bout while he was not with the UFC) on UFC Fight Pass and a highlight with Quarry’s likeness is in the video montage of the UFC PPVs.

While the UFC argues that the “express terms” of Quarry’s contract with the UFC show that his claims are time-barred by a statute of limitations.  However, Quarry argues that he can show evidence of affirmative “overt acts” taken by Zuffa with the use of his likeness/image still on Fight Pass.  Quarry’s attorneys state that fighters are not compensated for the use of their likeness/image on UFC Fight Pass and this is furtherance of the antitrust claims filed by Plaintiffs.

In addition, they cite posters autographed by Quarry from his title fight at UFC 56 on sale on the UFC web site store for $999.999 and $1,149.99.  He has not received compensation for these posters

Also of note, Quarry notes a document produced by Zuffa in discovery which allegedly accounts for uses of his image or likeness within the limitations period.

In opposing Zuffa’s argument that Quarry cannot show a continued violation of antitrust laws because of his own “receipt of benefits,” Quarry lawyers cite the Ed O’Bannon and Bill Russell cases brought against the NCAA for use of their images and likenesses.  Quarry’s lawyers note that the court rejected arguments that scholarship agreements by O’Bannon and Russell occurred much more than four years before their lawsuits were filed.  Quarry’s tie this ruling as similar to Quarry’s contract with the UFC and the continued use of his image and likeness on Fight Pass.  Notably, Boies Schiller, Zuffa’s attorneys here, was one of the firms representing the plaintiffs against the NCAA.

Quarry’s Opposition to Summary Judgment Motion by JASONCRUZ206 on Scribd

Payout Perspective:

The basic argument here is that Zuffa claims that Quarry’s lawsuit is barred by a 4 year statute of limitations since his contract with the UFC was in 2010.  However, Quarry argues that Zuffa is still using his likeness/image through UFC Fight Pass and selling his autograph on the UFC web site.  It is ironic that Zuffa’s attorneys have been on both side of this argument and will be interested to see how they respond.

Lesnar files own Motion to Dismiss Hunt lawsuit

March 27, 2017

A day after Brock Lesnar was officially served the lawsuit filed by Mark Hunt, his attorneys have filed a Motion to Dismiss the lawsuit.  Howard Jacobs, the California attorney specializing in drug testing and represented Lesnar in his case against USADA, is also representing him in this lawsuit.

Lesnar has joined the UFC and Dana White’s Motion to Dismiss which was filed last month and provided its own briefing specific to Lesnar’s case.  The first matter Lesnar’s motion argued was that Hunt’s RICO violations were not sufficient to stand against Lesnar.

Specifically, it joins the UFC/White’s argument regarding the perceived missteps by Hunt in stating that he lacks “standing” – essentially the legal right, to pursue a Civil RICO Claim.  Here, Lesnar highlights that Hunt’s damages are speculative at best.  He also identifies that Hunt does not show the requisite steps needed to uphold a Civil RICO claim.  Essentially, there is no “pattern of racketeering activity” by an “enterprise.”

Lesnar’s attorneys state that Hunt’s claim is “so incredibly deficient” as to the WWE superstar that “it is difficult to know where to event begin.”

The motion argues that Hunt’s complaint as to the RICO violation does not show an existence of a RICO conspiracy.  Basically, Lesnar contends that you cannot simply allege a conspiracy violating the RICO statute just because there are multiple allegations.

Payout Perspective:

Lesnar’s Motion to Dismiss was obviously premeditated prior to service on the WWE sports entertainer.  The motion details the deficiencies that may likely halt the lawsuit before it begins with respect to the Civil RICO claims.  The motion identifies for the court the issues it has with claiming that there was a conspiracy set forth by the UFC, White and to his extent, Lesnar.  If nothing else, we might see the court dismissing the Civil RICO claim as to Lesnar.  MMA Payout will have more on this.  Stay tuned.

Show Money Episode 15 talks Mayweather-McGregor, Bellator, WME-IMG, Hunt-UFC and more

March 26, 2017

We’re back: Gift and Nash of Bloody Elbow and yours truly discussing Mayweather-McGregor, Bellator, WME-IMG, Hunt-UFC and I get mad at a judge.

Kickboxer’s estate sues Roufusport

March 25, 2017

The Estate of Dennis Munson, Jr. has filed a lawsuit against the Roufus Sport and other entities as a result of his death during an amateur kickboxing event in Milwaukee.  John Diedrich of The Milwaukee Journal-Sentinel reported on the lawsuit and previously wrote about the errors that occurred on the night the amateur kickboxer died.

In addition to Roufus Sport, the estate sued the ring side doctors on hand among others that failed to stop the unregulated amateur fight.  At the time, amateur kickboxing was not covered by the state of Wisconsin – only boxing and MMA.  A law was passed after the unfortunate incident to include kickboxing as a regulated sport in the state.

Since kickboxing was unregulated at the time, the state did not investigate the event.  An investigation by the Milwaukee Police Department and the district attorney’s office did not bring criminal charges.

Payout Perspective:

The lawsuit, filed this past week, was likely to occur due to the safety failures surrounding the event.  It’s not clear that regulation would have saved Munson’s life, but there would be a greater likelihood that with safety rules in place, the fight would have been stopped earlier and/or the measures to ensure the medical attention needed might have prevented his death.

Lesnar served in Hunt lawsuit

March 23, 2017

Brock Lesnar has been personally served in the Mark Hunt lawsuit according to court papers filed today.  The UFC heavyweight filed the lawsuit in January in Nevada.

Earlier this week, Hunt’s attorneys filed its opposition brief in the UFC and Dana White’s Motion to Dismiss.  Lesnar had not yet been served according to a footnote in the brief.  The attorneys for Hunt had been working to serve Lesnar but had been unsuccessful.

Proof of Service by JASONCRUZ206 on Scribd


Since Lesnar is a Canadian citizen and he was unwilling to accept service voluntarily, Hunt had to serve him pursuant to the protocol of the Hague convention.  While this might sound daunting, it shouldn’t be.

Payout Perspective:

One would have to think that Lesnar join the Motion to Dismiss brought by the UFC and White.  Although this Lesnar’s claims differ from the UFC and White, expect the current WWE star’s attorney to proclaim the lawsuit as without merit.  MMA Payout will have more on this in the coming weeks.

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